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Last Will and Testaments

Posted by: Ibay | Posted on: December 15th, 2015 | 0 Comments

“With reference to Greek Mythology it has often been said that the other bank of the river Styx is lined with the shades of dissatisfied testators waiting to receive their judicial parsonages from those who have misconstrued their wills”

Everybody who has assets should have a will. One can have a very simple will drafted in concise language setting out the testators wishes.

It is however advised that more complex wills should be drafted by an Attorney, Accountant or Financial Advisor so that there can hopefully be no ambiguity in the determination of the testators wishes after death.

We at Wilder Lockitch offer not only the services of drafting and updating last will and testaments but we also accept the appointment of executor with regard to the administration of estates. We believe with our in depth knowledge of our clients financial affairs we are in a position of strength to administer the estates of our clients if need be.

JOINT WILLS AND MASSING

One of the most frequent forms of wills is the joint will, particularly among spouses married in community of property. The law reports are full of cases where such wills have had to be construed, the main cause of ambiguity being whether the will effected a massing or not.
In spite of its form a joint will is simply a document containing the wills of two or more persons. It may operate as the will of the first dying of the testator’s only. It may also operate as the will of the surviving testator on death. If it does the survivor is free to revoke it at any time before death.
If however the joint will effects a massing of the estates of both testators then after the death of the first dying testator, the survivor, if they accept the benefits conferred upon them by the will cannot dispose by a later will their share of the massed estate. They are however free to make a fresh will to deal with all other assets that they may acquire after the death of the first dying that did not form part of the massed estate.

Unless you specifically wish your estates to be massed and the Will must be very clear that the disposition does in fact constitute massing – we do not recommend joint wills.

MATTERS OFTEN OVERLOOKED WHEN DRAFTING A LAST WILL AND TESTAMENT

The testator often forgets that there may well be a debit loan account due by themselves to either a Corporate Entity or a Trust that they are involved in. This debit loan account is a claim against the estate of the deceased and in the case of a Corporate Entity gives rise to a deemed dividend subject to a 15%, dividends withholding tax, if not taken over by the heirs or legatees of the deceased. If the loan is in favour of a trust there are no income tax implications, however the testator should be mindful that there may be beneficiaries in the trust who may benefit from the unintended consequences of this claim.

Certain estates are asset rich and cashless. It is important to ensure that the estate has sufficient cash so as to avoid either a cash shortfall in which event the heirs or legatees have to make a contribution or alternatively the executor needs to exercise his discretion and in many cases dispose of assets at an inappropriate time. Apart from normal creditors and secured mortgage claims the estate could also have estate duty (20% of the net value of the estate after bequests to surviving spouses and charitable institutions, less the abatement, currently R 3.5 million) as well as a deemed capital gains tax determined at date of death which can be deferred if the bequest of the assets giving rise to the deemed capital gain are bequeathed to a surviving spouse. There are also executor’s fees and administration costs to consider. It is thus important to ensure that the estate has sufficient cash to expunge these liabilities. A common, however often, expensive route is to take out sufficient life assurance to cover these liabilities. To date we have never come across a surviving spouse who has said that the deceased was over insured.

The last issue to address is the situation of freezing of bank accounts. Technically speaking notwithstanding the fact that a corporate entity (Close Corporation or Company) has perpetual succession in the case of a sole member or director the bank account should be frozen by the bank. In practice we have seen leniency and the banks have often waited until the executor has taken up appointment. In the case of individuals married in community of property once again technically both accounts could be frozen by the bank but once again we have seen leniency.
In conclusion remember to update your will as and when your circumstances change not only when embarking on an overseas journey.
Author: Simon Aaron & Izel Haumann